The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Democratic National Alliance’s (DNA) leader yesterday accused the Government of squandering its Value-Added Tax (VAT) revenue boost, saying: “We seem to be spending money like drunken sailors.”

Branville McCartney told Tribune Business that the Christie administration had “failed miserably” in both trying to grow the economy and reduce the $6.5 billion national debt, despite the projected $300-$350 million net revenue increase set to come from VAT.

“Something seems to be amiss in that regard,” he said. “I heard the minister of state for finance the other night speaking about how, in the mid-year Budget debate, they will outline how VAT has been performing and how we’re doing financially.

“But it would seem something is wrong; something is not working. We seem to be spending money like drunken sailors, not realising this money is not coming back to us as investments, but it’s money that’s been spent.

“It’s gone. We’ll have to pay for it, as well as our children and our children’s children if we don’t get it right.”

Mr McCartney was speaking after the Central Bank of the Bahamas, in its report on December 2015’s economic developments, revealed that despite earning more than $271 million in gross VAT revenues during the five months to end-November last year, the fiscal deficit for the same period was $134 million.

Although the latter figure represented a 50 per cent year-over-year decrease, it still represents ‘red ink’ that will be added to the national debt, with Government spending increasing by 8.1 per cent or almost $65 million to $869.6 million.

Mr McCartney warned that the Bahamian dollar would “inevitably” be devalued if the Bahamas failed to arrest its ever-increasing national debt, plus increase foreign currency and investment inflows.

Explaining the consequences, he added: “You like going to Miami? Well, that won’t happen like it does now.”

Referring to the Baha Mar project, Mr McCartney told Tribune Business: “The Government has placed all its eggs in one basket, and they’ve shown they have no idea about building and growing this economy, and reducing our debt, notwithstanding the introduction of VAT.

“They’ve failed miserably in that regard. They’ve placed all our eggs with one foreign investor, and have not one iota what to do otherwise.”

Describing the Bahamas’ current prospects as”very bleak”, the DNA leader said: “People are leaving. There’s a brain drain happening like never before.

“We talk to students going to college, who are looking to leave and never come back. We have families, a number of Bahamian families, who are looking to leave the country because of the crime, the cost of living and, quite frankly, the lack of opportunities.

“They’re looking at Canada, parts of Europe, parts of the US to go and live. They’re saying it’s not a good country,” Mr McCartney added.

“They’re right, but we can make it better if our leaders do the right thing and clean up the crime concerns, revamp the education system and move the country from a ‘Third World’ country to a ‘First World’ country.

“We’ve been given the opportunity to have the greatest place in the world, but have let it slip. We could get it right with the right direction.”

Mr McCartney said Bahamians were too often left “holding the bag” by foreign investors who left millions of dollars in unpaid taxes and other liabilities behind after exiting this nation.

“We have persons who come to the country, and they leave owing millions and millions,” the DNA leader told Tribune Business. “And the Bahamian people are the ones holding the bag.

“Some international companies come to the Bahamas, use us, get what they wanted and have left us high and dry.”

The Auditor General’s report on the Government’s finances for 2013-2014, released last week, revealed that a total $51.5 million was still owed by closed Bahamian casinos.

It reiterated previous calls that “urgent steps be taken to collect taxes due to the Government before the opportunity to do so no longer exists”. Otherwise, it suggested that “a policy decision be made” to write-off the sums owed.

The Auditor General’s report noted that there had been an upward revision in the outstanding casino taxes said to be due from the Crystal Palace’s former owner, billionaire investor Philip Ruffin.

It revealed that the true sum owed by Mr Ruffin had increased by $2.147 million, from $5.13 million to $7.277 million, as a result of a “review” by the Government’s own Revenue and Tax Departments.

This was despite Prime Minister Perry Christie’s assertion in the House of Assembly on October 8, 2014, that the Auditor General’s 2011-2012 fiscal year report was incorrect on the billionaire’s outstanding tax balance.

He suggested then that Mr Ruffin’s outstanding casino tax balance had been settled when he sold the Wyndham and Crystal Palace casino to Sarkis Izmirlian and Baha Mar.

Mr Ruffin’s was the only bill to be increased, as the sums outstanding from the Isle of Capri when it operated the Grand Lucayan casino were cut by $4.796 million to just $124,955. And the former Lucayan Beach’s outstanding taxes were reduced by $2.095 million to $22.131 million.